Statement of changes in working capital, Cost Accounting

Assignment Help:

A statement of changes in working capital assists us in locating where such changes took place. In the first example we try to demonstrate the increase or decrease in particular items and then try to categorize them in terms of decrease and increase in working capital. As working capital is measured through subtracting current liabilities from current assets, any raise in current assets and any reduce in current liabilities demonstrates a raises in working capital. Likewise, reduce in current assets and a raise in current liabilities represent a decrease in working capital.

 The statement of changes in working capital as Table no.1 explains that the raises in current assets amounted to Rs. 52 million, a main part of the increase occurring out of cash, inventory and receivable. Reduce in working capital came about mainly from the increased accounts payable, advances taken from customers and taxes payable. Total amount of reduce in working capital resulting from raise in current liabilities amounted to Rs. 25 million, hence showing a net raise in working capital of Rs. 27 million.

TOLLS INDIA LTD.

Statement of changes in Working Capital for the year ending December 31, 2000

                  (Rs. In Millions)

 

Dec. 31

2003

 

Dec. 31

2002

Increase

(Decrease)

Working Capital

Increase  Decrease

Current Assets

 

 

 

 

 

Cash

19.05

 

10.87

8.18

8.18

Accounts receivable

32.25

 

20.28

11.97

11.97

Loans and advances

42.58

 

33.82

8.76

8.76

Other current assets

17.20

 

15.93

1.27

1.27

Inventory

120.92

 

99.10

21.82

21.82

Total

232.00

 

180.00

52.00

 

 

 

 

 

 

Current Liabilities &

 

Provisions

Acceptances

4.74

 

3.02

 

 

1.72

 

 

1.72

Accounts payable

27.16

 

18.75

 

 

8.41

 

 

8.41

Advances against sales

26.60

 

20.28

 

 

6.32

 

 

6.32

Other liabilities

8.86

 

7.95

 

 

0.91

 

 

0.91

Interest accrued

2.64

 

2.00

 

 

0.64

 

 

0.64

Taxes payable

25.55

 

20.45

 

 

5.10

 

 

5.10

Proposed dividend

2.25

 

2.25

 

 

-

 

 

-

Bonus payable

3.40

 

2.35

 

 

1.05

 

 

1.05

Other provisions

3.80

 

2.95

 

 

0.85

 

 

0.85

Total

105.00

 

80.00

 

25.00

 

52.00

 

25.00

 

 

 

Working Capital

 

 

 

127.00

 

 

 

 

100.00

 

 

 

 

 

 

27.00

 

 

 

 

Increasing Working Capital

 

 

27.00

 

 

 

 

 

 

 

 

 


Related Discussions:- Statement of changes in working capital

Cost accounting, some clarificationon how to compute closing stock and open...

some clarificationon how to compute closing stock and openning stock using marginal costing technique and absorption.

Comment on the cash- flow impacts, Chester & Wayne is a regional food distr...

Chester & Wayne is a regional food distribution company. Mr. Chester, CEO, has asked your assistance in preparing cash-flow information for the last three months of this year. Sele

Recording Transactions, I have a project due this week and I am having slig...

I have a project due this week and I am having slight issues with the transactions. I cannot seem to receive the correct titles under the recordings

Compute avoidable interest incurred during 2014, Early in 2014, Dobbs Corpo...

Early in 2014, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2014 and

Determine profit by using absorption costing, Determine Profit by Using Abs...

Determine Profit by Using Absorption Costing Assuming the fixed overhead absorption rate was Ksh.3 per litre, then what would be the profit utilizing absorption costing? a)

Determine the expected rate of growth of dividends, General Motors has to r...

General Motors has to raise new capital in one of the following three ways. Using the income tax rate of 32%, find the after-tax cost of new capital in each case. (A) Sell commo

Wat is bep in cost accounting, The level of activity at which total revenue...

The level of activity at which total revenues eqivalent total costs. A point at which there is no profit and no loss.

Budget, budget preparation

budget preparation

Prepare a partial income statement, Timbatown Pty Ltd is a manufacturer of ...

Timbatown Pty Ltd is a manufacturer of timber tables and chairs. The company mostly sells on a retail basis to household consumers, but occasionally receives large orders for table

Balance sheet, The following information is provided to you concerning Lydi...

The following information is provided to you concerning Lydia Ltd as at 30 June 2012.  Assume a company tax rate of 30%. (i) The balance of rent received in advance in the balan

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd